§ 1251 Bank Control Acquisition Rules

This law says you can't take over a bank or the company that owns a bank without getting permission first. It stops people from buying or trading shares to control a bank without asking the government.

Key Takeaways

•You can't buy or trade shares to take over a bank without asking the government first.
•You can't ask bank owners to agree to a deal that would give someone else control without permission.
•You can talk about buying a bank, but you can't actually do it until you get approval.

Example

Someone wants to buy a lot of shares in a bank to become the boss.

They have to ask the government for permission first. If they don't, they're breaking the law.

No person shall, directly or indirectly, unless the commissioner has approved such acquisition of control, do any of the following: (a) Make a tender offer for, a request or invitation for tenders of, or an offer to exchange securities for, any voting security or any security convertible into a voting security of a bank or a controlling person if the person making such tender offer, request or invitation for tenders, or offer to exchange securities would, by consummation thereof, directly or indirectly, acquire control of such bank or such controlling person. (b) Solicit approval of any shareholder of a controlling person for a merger, consolidation, sale of assets, or other transaction by which any person other than such controlling person would acquire control of the bank controlled by such controlling person. (c) Acquire control of a bank or a controlling person; provided, however, that nothing in this subdivision shall be deemed to prohibit any person from negotiating to acquire (but not acquiring) control of a bank or a controlling person. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

Key Takeaways

•You can't buy or trade shares to take over a bank without asking the government first.
•You can't ask bank owners to agree to a deal that would give someone else control without permission.
•You can talk about buying a bank, but you can't actually do it until you get approval.

Example

Someone wants to buy a lot of shares in a bank to become the boss.

They have to ask the government for permission first. If they don't, they're breaking the law.

Key Takeaways

Example

Key Terms

References

§ 1251 Bank Control Acquisition Rules

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References